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The Structure of U.S. Outward Foreign Direct Investment in Mexico's Export Processing IndustryJames Gerber The industrial pattern of U.S. outward foreign direct investment in Mexicos maquiladora industry is analyzed within the economic framework of comparative advantage and economies of scale. Descriptive statistics and location quotient indexes are used to show that U.S. firms are far more likely than firms from other countries to use the maquiladora form when they commit foreign direct investments to Mexico. In addition, U.S. investments tend to be highly concentrated, both in terms of industrial sectors and geographically. Another feature of the industrial concentration of U.S. investments is that it is fundamentally different from the industrial composition of U.S. manufacturing at home. In a causal sense, U.S. FDI in Mexicos maquiladora sector appears to stem from the characteristics of Mexicos comparative advantage and economies of scale, both internal and external.